Gold Coins and Bars Series - Part 1

Gold Coins and Bars Series - Part 1








[You must be registered and logged in to see this image.]Part 1 of a 3 part series.

Gold
has been an alluring attraction for man throughout the ages. Wars have
been fought over it, love has been won by the use of it and merchants
have been made wealthy because of it.

It has always been regarded
as a precious metal and the first recorded use of it is in Varna,
Bulgaria around 5000 BC. Gold has been in use as a form of money, in
one form or another from at least 560 BC until the end of the Bretton
Woods system in 1971. It has also been used as a store of value both by
individuals and countries for much of that period right up to the
present day.

With a melting point of 1063°C, it is a bright
shiny, soft and malleable metal primarily used in coatings for
electrical connections. Pure fine gold is 24 Karat (abbreviated K).
Alloys of gold are calculated on a basis of 24 parts. 14K is 14 parts
gold and 10 parts other metals. various gold colors are created by
alloying other metals that impart their color characteristics to the
gold.

Gold, and some other precious metals such as silver,
platinum and palladium for example, are assets that are both tangible
and liquid (i.e. easily traded), unlike real estate which is tangible
but not liquid, or company shares and bonds which are liquid but not
tangible.

Considering its high density and high value per unit
mass, storing and transporting gold is very easy. Gold does not corrode
and, in small amounts, is not particularly heavy. Historically, it has
also been very easy to verify that an offered coin had the density of
gold through the use of Archimedes' principle. Today, however, some
metals are denser than gold yet cheaper.

Some of the reasons
people buy and accumulate gold in coin and bar form include, as a hedge
against financial and economic instability or to hide money or assets
from, family, governments or others. Also as a hobby (usually confined
to coin collecting but there are some who collect gold bars also)

Some
people buy gold through a gold exchange-traded fund, or in the form of a
gold certificate. In this case it is more like an investment and these
people are more prone to trade or buy and sell the gold representations.
In this case the gold is deposited in a bank and the owner has a
certificate or account to represent their holding.

It is not
difficult to see why gold is such a favorite choice of currency over the
years. It does not tarnish or rust. It keeps its value relative to the
value of other goods and services. With the advent of the internet the
transfer of funds by the use of gold has become big business. These
days, millions of dollars are moved around the planet literally at the
speed of light.

End of part 1 of a 3 part series on Gold Coins and Bars.